CBS Corporation (NYSE: CBS) and Starz Acquisition (NASDAQ:STRZA) are both consumer discretionary companies, but which is the better stock? We will compare the two businesses based on the strength of their earnings, dividends, risk, profitability, institutional ownership, valuation and analyst recommendations.

Profitability

This table compares CBS Corporation and Starz Acquisition’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CBS Corporation 1.27% 49.51% 7.68%
Starz Acquisition -68.21% -14.75% -6.41%

Dividends

CBS Corporation pays an annual dividend of $0.72 per share and has a dividend yield of 1.2%. Starz Acquisition does not pay a dividend. CBS Corporation pays out 211.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CBS Corporation has increased its dividend for 5 consecutive years.

Analyst Ratings

This is a breakdown of recent ratings and target prices for CBS Corporation and Starz Acquisition, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CBS Corporation 0 5 21 0 2.81
Starz Acquisition 0 0 1 0 3.00

CBS Corporation presently has a consensus target price of $73.50, suggesting a potential upside of 23.70%. Starz Acquisition has a consensus target price of $36.00, suggesting a potential upside of 3.06%. Given CBS Corporation’s higher probable upside, equities analysts clearly believe CBS Corporation is more favorable than Starz Acquisition.

Earnings and Valuation

This table compares CBS Corporation and Starz Acquisition’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
CBS Corporation $13.20 billion 1.81 $3.05 billion $0.34 174.76
Starz Acquisition N/A N/A N/A $1.79 19.51

CBS Corporation has higher revenue and earnings than Starz Acquisition. Starz Acquisition is trading at a lower price-to-earnings ratio than CBS Corporation, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

75.1% of CBS Corporation shares are held by institutional investors. Comparatively, 80.2% of Starz Acquisition shares are held by institutional investors. 2.0% of CBS Corporation shares are held by company insiders. Comparatively, 8.5% of Starz Acquisition shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Volatility & Risk

CBS Corporation has a beta of 1.7, meaning that its share price is 70% more volatile than the S&P 500. Comparatively, Starz Acquisition has a beta of 0.07, meaning that its share price is 93% less volatile than the S&P 500.

Summary

CBS Corporation beats Starz Acquisition on 9 of the 14 factors compared between the two stocks.

About CBS Corporation

CBS Corporation is a mass media company. The Company operates through four segment: Entertainment, Cable Networks, Publishing, Local Media. The Entertainment segment comprises the CBS TV Network; CBS TV Studios; CBS Studios International and CBS TV Distribution; CBS Interactive; CBS Films; and the Company’s digital streaming services, CBS All Access and CBSN. The Cable Networks segment comprises Showtime Networks, which operates its subscription program services, Showtime, The Movie Channel, and Flix. The Publishing segment comprises Simon & Schuster, which publishes and distributes consumer books under imprints such as Simon & Schuster, Pocket Books, Scribner and Gallery Books. The Local Media segment comprises CBS TV Stations, it owns 30 broadcast TV stations; and CBS Local Digital Media. Its businesses span the media and entertainment industries, including the CBS TV Network, cable networks and content production and distribution.

About Starz Acquisition

Starz Acquisition LLC, formerly Starz, is an integrated media and entertainment company. The Company provides premium subscription video programming in the United States to cable operators, satellite television providers, telecommunications companies and online video providers. The Company’s segments include Starz Networks and Starz Distribution. The Starz Networks segment provides premium subscription video programming to the United States multichannel video programming distributors (MVPDs), including cable operators (such as Comcast and Time Warner Cable), satellite television providers (such as DIRECTV and DISH Network) and telecommunications companies (such as AT&T and Verizon). The Starz Distribution segment includes the operations of its Anchor Bay Entertainment, Starz Digital and Starz Worldwide Distribution businesses. It also develops, produces and acquires entertainment content and distributes this content to consumers in the United States and throughout the world.

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